Just wanted to add another perspective on the 1099-G issue. If you use TurboTax, there's a specific section when you enter the 1099-G info that will calculate how much of your state refund is taxable. It asks if you itemized last year and then does some calculations behind the scenes. Also, if you took the standard deduction last year (2020), then NONE of your state refund is taxable for 2021! The form is still issued, but you don't have to report it as income. This is because you didn't get any tax benefit from deducting state taxes.

Omg this exact thing happened to me last year! I freaked out because I thought I had to pay taxes on the entire refund amount. My accountant explained that you only have to report it if you itemized, AND only the amount that actually benefited you. Pro tip: if you change your W-4 to have the right amount withheld by your employer, you can avoid getting large refunds in the first place. Then you don't have to deal with this 1099-G nonsense the following year!

Does anyone know if the insurance company sends the 1095-B directly to the IRS too? I got mine with incorrect info but never bothered to get it fixed since I thought it was just for my records.

I went through almost the exact same situation last year with multiple employers and HSA eligibility confusion. What helped me was creating a detailed timeline of my coverage periods with documentation from each employer's HR department confirming the exact dates I was enrolled in their HDHP plans. When I called my insurance company about incorrect 1095-B forms, I found it helpful to have my enrollment dates and plan details ready before the call. The first rep I spoke with was also confused, but when I escalated to a supervisor and explained that the incorrect form could impact my HSA tax reporting, they were much more helpful and issued a corrected form within a week. Since you contributed $5,800 to your HSA, make sure you calculate your prorated contribution limit correctly on Form 8889. With your coverage gap in March and switching between plans, you'll want to be precise about which months you were actually covered by an HDHP to avoid any issues with excess contributions.

Don't forget about state estimated taxes too! Depending on your state, you might need to make estimated payments to them as well. I got hit with a nasty penalty in California because I remembered the federal payment but completely spaced on the state one.

One thing I learned the hard way - if most of your income is from a regular job with withholding, you can also just increase your withholding for the rest of the year instead of making separate estimated payments. Just update your W-4 with your employer to take out extra money from your remaining paychecks. The IRS treats withholding as if it occurred evenly throughout the year, even if you increase it late in the year. This can sometimes help avoid the penalties for quarterly underpayment since estimated payments are tied to specific quarters.

Quick question about this strategy - does anyone know if there are different rules for ETFs vs individual stocks when it comes to tax gain harvesting? I mainly hold index funds and wasn't sure if there were any special considerations.

Great question about tax gain harvesting! I did this exact strategy last year when my income was low. Just want to emphasize a few key points that have been mentioned: 1. You can indeed buy back immediately - there's no waiting period for gains like there is for losses (wash sale rule) 2. The gain is locked in the moment you sell, regardless of when you repurchase 3. Make sure you're only doing this with long-term holdings (over 1 year) to qualify for the 0% capital gains rate One thing I'd add is to be strategic about which specific lots you're selling if you have multiple purchases of the same stock. You can use "specific identification" to choose exactly which shares to sell to maximize your tax benefit. Also, don't forget to factor in any transaction fees - while the tax savings are great, make sure the brokerage fees don't eat into your benefits too much. Good luck with your harvesting strategy! It's a smart move to take advantage of your low income year.

Has anyone used TurboTax to report a business sale? I'm trying to figure out if the self-employed version can handle this or if I need to upgrade to their business version?

I just went through this exact same situation when I sold my consulting firm last year. The key thing that helped me was understanding that you need to treat this as an asset sale, not a stock sale, which means each component of your business gets reported differently. For your client list and goodwill (the intangible value you built up over 8 years), these qualify as Section 197 intangibles and should be reported on Form 4797 Part I since you held them for more than a year. This gives you long-term capital gains treatment, which is much better than ordinary income rates. The installment sale aspect is important too - you'll definitely need Form 6252 to report the payments you'll receive over the next two years. This lets you spread out the tax liability rather than paying it all upfront on the 70% you received. One thing that caught me off guard was Form 8594 (Asset Acquisition Statement) - both you and the buyer need to file this with consistent asset allocations. Make sure your purchase agreement specifies how the sale price is allocated across different asset categories, or you might run into issues later. I'd strongly recommend getting professional help for this if you can. The classification of assets can make a huge difference in your tax bill, and there are specific rules about what qualifies for capital gains vs ordinary income treatment that aren't always intuitive.